The risks and uncertainties described below are not the only ones we face.
−Removed: Events that we do not currently anticipate, or that we currently expect to be immaterial, may also affect our results of operations, cash flows, and financial condition.
+Added: Events that we do not currently anticipate, or expect to be immaterial, may also materially adversely affect our results of operations, cash flows, and financial condition.
Risks Related to Our Business and Industry
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The shift of our clients’ preference to subscription-based offerings requires a scalable organization and a considerable investment of technical, financial, legal, managerial, and sales resources.
+Added: Until we fully complete our subscription transition, which we expect will occur in 2023, our operating results may be impacted.
+Added: Operating performance, revenue mix, and new arrangements in each period can fluctuate based on client preferences for our perpetual and subscription offerings.
Market acceptance of our subscription-based offerings will depend on our ability to continue to:
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We may not achieve the key elements of our strategy and grow our business as anticipated.
−Removed: We currently intend to grow our business by pursuing strategic initiatives.
+Added: We currently intend to grow our business by pursuing strategic initiatives consistent with becoming a Rule of 40 company, meaning a company with combined Annual Contract Value (“ACV”) growth rate and free cash flow margin of at least 40%.
Key elements of our strategy include increasing our market share by developing and delivering robust solutions that can work together seamlessly with maximum differentiation and minimal customization, offering versatility in the Pega Platform and application deployment and licensing options to meet the specific needs of our clients, growing our network of partner alliances, and developing the talent and organizational structure capable of supporting our revenue and earnings growth targets.
We may not achieve one or more of our key initiatives.
−Removed: Our success depends on our ability to manage our expenses as we grow our organization appropriately, successfully execute our marketing and sales strategies, successfully incorporate acquired technologies into our unified Pega Platform, and develop new products or product enhancements.
+Added: Our success depends on our ability to manage our expenses as we appropriately grow our organization, successfully execute our marketing and sales strategies, successfully incorporate acquired technologies into our unified Pega Platform, and develop new products or product enhancements.
If we are not able to execute these actions, our business may not grow as we anticipate, and our operating results and financial condition could be materially adversely affected.
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We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and difficulty in retaining highly skilled employees with appropriate qualifications.
−Removed: In addition, we believe our corporate culture has been a key contributor to our success to date.
−Removed: As we continue to grow and expand globally and navigate shifting workforce priorities, including an extended period of time in which our employees are working from their home locations or an increase in remote workers, we may find it difficult to maintain important aspects of our corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future success.
+Added: In addition, we believe our corporate culture has been a key contributor to our success.
+Added: Shifting workforce priorities, including an increase in remote workers, may make it more difficult to maintain important aspects of our corporate culture, negatively affecting our ability to retain and recruit personnel essential to our success.
The timing of our license and Pega Cloud revenue is difficult to predict, which may cause our operating results to vary considerably.
A change in the size or volume of license and Pega Cloud arrangements, or a change in the mix between perpetual licenses, term licenses, and Pega Cloud arrangements, can cause our revenues and cash flows to fluctuate materially between periods.
−Removed: Revenue from Pega Cloud and maintenance arrangements is typically recognized over the contract term, while revenue from license sales is recognized when the license rights become effective, typically upfront.
−Removed: Subscription license and services are generally billed and collected over the contract term, while perpetual license arrangements usually are billed and collected upfront when the license rights become effective.
+Added: Revenue from subscription service arrangements, which includes Pega Cloud and maintenance, is typically recognized over the contract term, while revenue from license sales is recognized when the license rights become effective, typically upfront.
+Added: Subscription licenses and services are typically billed and collected over the contract term, while perpetual license arrangements are generally billed and collected upfront when the license rights become effective.
Factors that may influence the predictability of our license and Pega Cloud revenue include:
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If our retention rate for those clients decreases, our business, operating results, and financial condition could be materially affected.
−Removed: We are investing heavily in sales and marketing, research and development, and support resources in anticipation of continued growth in license and Pega Cloud arrangements, and we may experience decreased profitability or losses and reduced or negative cash flow if we do not continue to increase the value of our license and Pega Cloud arrangements to balance our growth in expenses.
−Removed: We have been expanding our sales and marketing capacity to meet the increasing demand for our software and to broaden our market coverage by hiring additional sales and marketing personnel.
−Removed: We anticipate that we will need to provide our clients with more maintenance support because of this increase in demand and have been hiring additional personnel in this area.
−Removed: We continue to invest significantly in research and development to expand and improve the Pega Platform and applications.
+Added: We are investing heavily in our business in anticipation of continued growth in license and Pega Cloud arrangements, and we may experience decreased profitability or losses and reduced or negative cash flow if we do not continue to increase the value of our license and Pega Cloud arrangements to balance our growth in expenses.
+Added: We expect to provide our clients with more cloud and maintenance support as our business grows and have been investing significantly in research and development to expand and improve the Pega Platform and applications.
These investments have resulted in increased fixed costs that do not vary with the level of revenue.
If the increased demand for our offerings does not continue, we could experience decreased profitability or losses and reduced or negative cash flow because of these increased fixed costs.
−Removed: Conversely, if we are unable to hire sales and marketing personnel to meet future demand or research and development personnel to enhance our current products or develop new products, we may not be able to achieve our sales and profitability targets .
+Added: Conversely, if we are unable to achieve an appropriate balance of sales and marketing personnel to meet future demand or research and development personnel to enhance our current products or develop new products, we may not be able to achieve our sales and profitability targets .
+Added: We rely on third-party relationships.
+Added: We have a number of relationships with third parties that are significant to our sales, marketing, support, and product development efforts, including hosting facilities for our Pega Cloud offering.
+Added: We rely on software and hardware vendors, large system integrators, and technology consulting firms to supply marketing and sales opportunities for our direct sales force and to strengthen our offerings using industry-standard tools and utilities.
+Added: We also have relationships with third parties that distribute our products.
+Added: There can be no assurance that these companies, many of which have far greater financial and marketing resources than us, will not develop or market offerings that compete with ours in the future or will not otherwise end or limit their relationships with us.
+Added: Further, the use of third-party hosting facilities requires us to rely on the functionality and availability of the third parties’ services, as well as their data security, which despite our due diligence, may be or become inadequate, as further discussed below under the risk factor “We rely on third-party hosting providers to deliver our offerings, and any disruption or interference with our use of these services could adversely affect our business.”
We face risks from operations and clients based outside of the United States.
−Removed: We market our products and services to clients based outside of the U.S., which represent 42% of our revenue over the last three years.
+Added: We market our products and services to clients based outside of the U.S., representing 42% of our revenue over the last three years.
We have established offices in the Americas, Europe, Asia, and Australia.
−Removed: We believe that growth will necessitate expanded international operations, resulting in increased managerial attention and costs.
We anticipate hiring additional personnel to accommodate increased international demand, and we may also enter into agreements with local distributors, representatives, or resellers.
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There can be no assurance that one or more of these factors will not have a material adverse effect on our international operations and, consequently, on our business, operating results, and financial condition.
−Removed: We rely on third-party relationships.
−Removed: We have a number of relationships with third parties that are significant to our sales, marketing, support, and product development efforts, including hosting facilities for our Pega Cloud offering.
−Removed: We rely on software and hardware vendors, large system integrators, and technology consulting firms to supply marketing and sales opportunities for our direct sales force and to strengthen our offerings using industry-standard tools and utilities.
−Removed: We also have relationships with third parties that distribute our products.
−Removed: There can be no assurance that these companies, many of which have far greater financial and marketing resources than us, will not develop or market offerings that compete with ours in the future or will not otherwise end or limit their relationships with us.
−Removed: Further, the use of third-party hosting facilities requires us to rely on the functionality and availability of the third parties’ services, as well as their data security, which despite our due diligence, may be or become inadequate.
We are exposed to fluctuations in foreign currency exchange rates that could negatively impact our financial results and cash flows.
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Accordingly, if our consulting personnel’s involvement in future implementations decreases, this could materially adversely affect our consulting revenue.
−Removed: We frequently enter into a series of license or Pega Cloud arrangements that are each focused on a specific purpose or area of operations.
+Added: We frequently enter into a series of license or Pega Cloud arrangements that each focus on a specific purpose or area of operations.
If we are not successful in obtaining follow-on business from these clients, our financial performance could be materially adversely affected.
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We may not obtain follow-on sales, or the follow-on sales may be delayed, and our future revenue could be limited.
−Removed: This could lower the total value of all transactions, and materially adversely affect our financial performance.
−Removed: We will need to acquire or develop new products, evolve existing ones, address any defects or errors, and adapt to technology changes.
+Added: We will need to acquire or develop new products, evolve existing ones, address defects or errors, and adapt to technology changes.
Technical developments, client requirements, programming languages, industry standards, and regulatory requirements frequently change in the markets in which we operate.
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We may experience technical or other difficulties that will delay or prevent the successful development, introduction, or implementation of new or enhanced products.
−Removed: We may also experience technical or other challenges in the integration of acquired technologies into our existing platform and applications.
+Added: We may also experience technical or other challenges integrating acquired technologies into our existing platform and applications.
Inability to introduce or implement new or enhanced products in a timely manner could result in loss of market share if competitors are able to provide solutions to meet client needs before we do, give rise to unanticipated expenses related to further development or modification of acquired technologies, and materially adversely affect our financial performance.
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Competition for market share and pressure to reduce prices and make sales concessions is likely to increase.
−Removed: There can be no assurance that we will be able to compete successfully against current or future competitors or that the competitive pressures faced by us will not materially adversely affect our business, operating results, and financial condition.
+Added: There can be no assurance that we will be able to compete successfully against current or future competitors or that the competitive pressures we face will not materially adversely affect our business, operating results, and financial condition.
See "Competition" in Item 1 of this Annual Report for additional information.
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This concentration of ownership may delay or prevent a change in control, impede a merger, consolidation, takeover, or other business combination involving us, discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, or result in actions that may be opposed by other stockholders.
+Added: If we are unsuccessful in the appeal of the trial court judgment in our litigation with Appian Corp., our operating results and financial condition would be adversely impacted.
+Added: We are currently party to litigation with Appian Corp.
+Added: - see Part I, Item 3 “Legal Proceedings” and "Note 20.
+Added: Commitments And Contingencies" in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report.
+Added: On September 15, 2022, the circuit court of Fairfax County entered judgment for Appian in the amount of $2,060,479,287 and awarding post-judgment interest.
+Added: The Company filed a notice of appeal from the judgment the same day.
+Added: On September 29, 2022, the court approved the $25,000,000 letter of credit obtained by the Company to secure the judgment and suspended the judgment during the pendency of the Company’s appeal.
+Added: Appellate briefing is currently in process.
+Added: Although it is not possible to predict timing, this appeals process could potentially take years to complete.
+Added: We believe we have strong grounds to overturn the result in the trial court.
+Added: But if we are ultimately unsuccessful in prevailing in the matter in its entirety or in substantially reducing any judgment, we may be required to incur additional debt or otherwise engage in capital markets transactions, which may include a public offering or private placement of our equity securities or a sale or license of assets.
+Added: See below under the risk factor, “We may require additional capital in the future.” In addition, if we do not satisfy the judgment within 60 days following the expiration of the right to appeal, there may be an acceleration of liabilities under our Convertible Senior Notes due 2025 (the “Notes”) and our Credit Facility.
+Added: We believe that we have the financial strength to pay these amounts if it ever becomes necessary, but it is possible that we may not be able to engage in financing activities on desirable terms, which could have a material adverse effect on our business, financial condition, and operating results.
+Added: Further discussion of these risks is contained below under the heading “Risks Related to Our Financial Obligations and Indebtedness.”
Risks Related to Information Technology Resilience and Security
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It requires that we maintain an internet connectivity infrastructure that is robust and reliable within competitive and regulatory constraints that continue to evolve.
−Removed: Inefficiencies or operational failures, including temporary or permanent loss of client data, power outages, or telecommunications infrastructure outages, by our third-party service providers or us, could diminish the quality of our user experience resulting in contractual liability, claims by clients and other third parties, damage to our reputation, loss of current and potential clients, and negatively impact our operating results and financial condition.
−Removed: Security of our systems and global client data is a growing challenge on many fronts.
+Added: Inefficiencies or operational failures, including temporary or permanent loss of client data, power outages, or telecommunications infrastructure outages, by our third-party service providers or us, could diminish the quality of our user experience resulting in contractual liability, claims by clients and others, damage to our reputation, loss of current and potential clients, and negatively impact our operating results and financial condition.
+Added: Security of our systems and global client data is a growing challenge.
Cyber-attacks and security breaches may expose us to significant legal and financial liabilities.
−Removed: Security breaches could expose our clients and us to a risk of someone obtaining access to our information, to information our clients or their customers, or to our intellectual property, disabling or degrading service, or sabotaging systems or information.
−Removed: Any security breach could result in a loss of confidence in the security of our services, damage our reputation, disrupt our business, require us to incur significant costs of investigation, remediation and/or payment of a ransom, lead to legal liability, negatively impact our future sales, and result in a substantial financial loss.
High-profile security breaches at other companies have increased in recent years.
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Individual hackers, groups of hackers, and sophisticated organizations, including state-sponsored organizations, or nation-states themselves, may take steps that threaten our clients and us.
−Removed: Additionally, our Pega Cloud offering provides environments that are provisioned, monitored, and maintained for individual clients to create and deploy Pega-based applications using an Internet-based infrastructure.
+Added: Although we are not aware of having experienced any prior material data breaches, regulatory non-compliance incidents or cyber security incidents, we may in the future be impacted by such an event, exposing our clients and us to a risk of someone obtaining access to our information, to information of our clients or their customers, or to our intellectual property, disabling or degrading service, or sabotaging systems or information.
+Added: Any such security breach could result in a loss of confidence in the security of our services, damage our reputation, disrupt our business, require us to incur significant costs of investigation, remediation and/or payment of a ransom, lead to legal liability, negatively impact our future sales, and result in a substantial financial loss.
+Added: Additionally, our Pega Cloud offering provides provisioned, monitored, and maintained environments for individual clients to create and deploy Pega-based applications using an Internet-based infrastructure.
These services involve storing and transmitting client data and other confidential information.
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In addition, privacy, security, and data transmission concerns in some parts of the world may inhibit demand for our Pega Cloud offering or lead to requirements to provide our products or services in configurations that may increase the cost of serving such markets.
−Removed: The techniques used to obtain unauthorized access or sabotage systems change frequently and are generally not recognized until launched against a target.
−Removed: While we have invested in protecting our data and systems and our clients’ data to reduce these risks, there can be no assurance that our efforts will prevent breaches and, in fact, we deal with security issues on a regular basis and have experienced security incidents from time to time.
−Removed: Accordingly, there is a risk that a security breach will be successful and that such an event will be material.
+Added: The techniques used to obtain unauthorized access or sabotage systems change frequently and are generally only recognized once launched against a target.
+Added: While we have invested in protecting our data and systems and clients' data to reduce these risks, there can be no assurance that our efforts will prevent breaches.
+Added: We deal with security issues regularly and have experienced security incidents from time to time.
+Added: Accordingly, there is a risk that a security breach will be successful, and such an event will be material.
We carry data breach insurance coverage to mitigate the financial impact of a security breach, though this may prove insufficient in the event of a breach.
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The cost of these steps could negatively impact our operating results.
−Removed: We rely on third-party hosting providers to deliver our offerings.
−Removed: Therefore, any disruption or interference with our use of these services could adversely affect our business.
−Removed: Our use of third-party hosting facilities requires us to rely on the functionality and availability of the third parties’ services, as well as their data security, which despite our due diligence, may be or become inadequate.
+Added: We rely on third-party hosting providers to deliver our offerings, and any disruption or interference with our use of these services could adversely affect our business.
+Added: Our use of third-party hosting facilities requires us to rely on the functionality and availability of the third-party services and their data security, which, despite our due diligence, may be or become inadequate.
Our continued growth depends in part on the ability of our existing and potential customers to use and access our cloud services or our website to download our software within an acceptable amount of time.
−Removed: We use a number of third-party service providers for key infrastructure components, particularly concerning the development and delivery of our cloud-based products.
+Added: We use third-party service providers for key infrastructure components, particularly when developing and delivering our cloud-based products.
These service providers give us greater flexibility in efficiently delivering a more tailored, scalable customer experience and expose us to additional risks and vulnerabilities.
−Removed: Third-party service providers operate platforms that we access, and we are vulnerable to their service interruptions.
+Added: Third-party service providers operate platforms we access and which are vulnerable to service interruptions.
We may experience interruptions, delays, and outages in service and availability due to problems with our third-party service providers’ infrastructure.
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If we are unable to renew our agreements with our cloud service providers on commercially reasonable terms, an agreement is prematurely terminated, or we need to add new cloud services providers to increase capacity and uptime, we could experience interruptions, downtime, delays, and additional expenses related to transferring to and providing support for these new platforms.
−Removed: Any of the above circumstances or events may harm our reputation and brand, reduce our platforms’ availability or usage, and impair our ability to attract new users, any of which could adversely affect our business, financial condition, and results of operations.
+Added: Any of the above circumstances or events may harm our reputation and brand, reduce our platforms’ availability or usage, and impair our ability to attract new users, which could adversely affect our business, financial condition, and results of operations.
We may experience significant errors or security flaws in our products and services and could face privacy, product liability, and warranty claims.
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Typically, we enter into license agreements that contain provisions intended to limit the nature and extent of our risk of product liability and warranty claims.
−Removed: There is a risk that a court might interpret these terms in a limited way or hold part or all of these terms unenforceable.
+Added: A court might interpret these terms in a limited way or hold part or all of them unenforceable.
Also, there is a risk that these contract terms might not bind a party other than the direct client.
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Risks Related to Our Financial Obligations and Indebtedness
−Removed: We have a significant amount of debt that may limit our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur additional debt in the future, which may adversely affect our operations and financial results.
−Removed: As of December 31, 2021, we had $600 million aggregate principal amount of indebtedness under our Convertible Senior Notes due 2025 (the “Notes”).
+Added: We have significant debt which may limit our business flexibility, access to capital, and/or increase our borrowing costs, which may adversely affect our operations and financial results.
+Added: As of December 31, 2022, we had $600 million in aggregate principal indebtedness under our Notes and have outstanding letters of credit under our credit facility, including a $25 million letter of credit obtained to secure the judgment in our litigation with Appian.
Our indebtedness may:
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• place us at a competitive disadvantage compared to less leveraged competitors;
−Removed: • dilute the interests of our existing stockholders because of issuing shares of our common stock upon the conversion of the Notes;
+Added: • dilute existing stockholders from the issuance of common stock if the Notes are converted;
• increase our vulnerability to the impact of adverse economic and industry conditions.
Our ability to pay our debt when due or refinance our indebtedness, including the Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
−Removed: Our business may not generate sufficient cash flow from operations in the future to service our debt and make necessary investments in our business.
+Added: Our business may not generate sufficient cash flow from operations to service our debt and make necessary investments in our business.
Our ability to refinance our indebtedness will depend on the capital market conditions and our financial condition at such time.
−Removed: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations which could, in turn, result in that and our other indebtedness becoming immediately payable in full which could harm our financial condition, results of operation or cost of borrowing.
−Removed: In addition, we may incur additional debt to meet future financing needs.
−Removed: If we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness will increase.
+Added: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
+Added: In turn, this could result in that and our other indebtedness becoming immediately payable in full which could materially adversely affect our financial condition, results of operation or cost of borrowing.
+Added: We may require additional capital in the future.
+Added: We may require additional capital in the future to finance our operations.
+Added: If we raise funds through future issuance of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock.
+Added: Any future debt financing could involve restrictive covenants relating to our capital raising activities and other financial and operations matters, which may increase the risks related to our business and our ability to service and repay our indebtedness.
The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
−Removed: Under certain circumstances, the noteholders may convert their Notes at their option prior to the scheduled maturities.
+Added: Under certain circumstances, the noteholders may convert their Notes at their option prior to the scheduled maturity at the current conversion rate of 7.4045 shares of common stock per each $1,000 principal amount of Notes or an effective conversion price of $135.05 per share.
Upon conversion of the Notes, unless we elect to deliver solely shares of our common stock to settle such conversion, we will be obligated to make cash payments.
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Although it is our intention and we currently expect to settle the conversion value of the Notes in cash up to the principal amount and any excess in shares, there is a risk that we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Notes surrendered therefor or Notes being converted.
−Removed: In addition, our ability to make payments may be limited by law, by regulatory authority, or by agreements governing our future indebtedness.
+Added: In addition, our ability to make payments may be limited by law, regulatory authority, or agreements governing our future indebtedness.
Our failure to repurchase Notes when the Indenture requires the repurchase or to pay any cash payable on the Notes’ future conversions as required by the Indenture would constitute a default under the Indenture.
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The Capped Call Transactions may affect the value of the Notes and our common stock.
−Removed: In connection with the Notes’ issuance, we entered Capped Call Transactions with certain financial institutions (“option counterparties”).
+Added: In connection with the Notes’ issuance, we entered into Capped Call Transactions with certain financial institutions (“option counterparties”).
The Capped Call Transactions are generally expected to reduce the potential dilution of our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, with such reduction and/or offset subject to a cap.
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Our exposure to the credit risk of the option counterparties is not secured by any collateral.
−Removed: If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transaction.
+Added: If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor with a claim equal to our exposure at the time under such transaction.
Our exposure depends on many factors, but our exposure will generally increase if the market price or the volatility of our common stock increases.
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Conversion of the Notes may dilute the ownership interest of existing stockholders.
−Removed: The conversion of some or all of the Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares of our common stock upon conversion of any of the Notes.
+Added: If the Notes were converted, there would be dilution of the ownership interests of existing stockholders to the extent we deliver shares of our common stock upon conversion of any of the Notes.
Any sales in the public market of the common stock issuable upon such conversion could adversely affect our common stock’s prevailing market prices.
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The financial and operating covenants under the credit facility may limit our ability to borrow funds or capital, including for strategic acquisitions, share repurchases, and other general corporate purposes.
−Removed: Risks Related to Government Regulation and Intellectual Property
+Added: Risks Related to Intellectual Property and Government Regulation
+Added: We face risks related to intellectual property claims or appropriation of our intellectual property rights.
+Added: We rely primarily on a combination of patent, copyright, trademark, and trade secrets laws, as well as intellectual property and confidentiality agreements to protect our proprietary rights.
+Added: We also try to control access to and distribution of our technologies and other proprietary information.
+Added: We have obtained patents in strategically important global markets relating to the architecture of our systems.
+Added: We cannot be certain that such patents will not be challenged, invalidated, or circumvented, or that rights granted thereunder, or the claims contained therein will provide us with competitive advantages.
+Added: Moreover, despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our software or to obtain the use of information that we regard as proprietary.
+Added: Although we generally enter into intellectual property and confidentiality agreements with our employees and strategic partners, despite our efforts our former employees may seek employment with our business partners, clients, or competitors, and there can be no assurance that the confidential nature of our proprietary information will be maintained.
+Added: In addition, the laws of some foreign countries do not protect our proprietary rights as effectively as they do in the U.S.
+Added: There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar technology.
+Added: Other companies or individuals have obtained proprietary rights covering a variety of designs, processes, and systems.
+Added: Third parties have claimed and may in the future claim that we have infringed or otherwise violated their intellectual property.
+Added: We are currently party to litigation with Appian Corp.
+Added: - see Part I, Item 3 “Legal Proceedings”, "Note 20.
+Added: Commitments And Contingencies" in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report and the preceding risk factor captioned “If we are unsuccessful in the appeal of the trial court judgment in our litigation with Appian Corp., our operating results and financial condition would be adversely impacted.”
+Added: Although we attempt to limit the amount and type of our contractual liability for infringement or other violation of the proprietary rights of third parties and assert ownership of work product and intellectual property rights as appropriate, there are often exceptions, and limitations may not be applicable and enforceable in all cases.
+Added: Even if limitations are found to be applicable and enforceable, our liability to our clients for these types of claims could be material given the size of certain of our transactions.
+Added: We expect that software product developers, including us, will increasingly be subject to infringement and other intellectual property violation claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps.
+Added: As evidenced by our previously mentioned litigation with Appian Corp., depending on when and how asserted, these claims, with or without merit, are often time-consuming, result in costly litigation and subject us to significant liability for damages.
+Added: It is also possible that these claims result in treble damages if we are found to have willfully infringed patents or copyrights, cause product shipment and delivery delays, require us to enter into royalty or licensing agreements, or preclude us from making and selling the infringing software, if such proprietary rights are found to be valid.
+Added: Royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all.
+Added: Even if a license were available, we could be required to pay significant royalties, which would increase our operating expenses.
+Added: As a result, we may be required to develop alternative non-infringing technology, which could require substantial effort and cost.
+Added: If we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software and may be unable to compete effectively, which could have a material effect upon our business, operating results, and financial condition.
+Added: Intellectual property rights claims by third parties are extremely costly to defend, could require us to pay significant damages, and could limit our ability to use certain technologies.
+Added: Companies in the software and technology industries, including some of our current and potential competitors, own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights.
+Added: In addition, many of these companies can dedicate greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
+Added: The litigation may involve patent holding companies or other adverse patent owners that have no relevant product revenues and against which our patents may, therefore, provide little or no deterrence.
+Added: Third parties have claimed and may claim in the future that we have misappropriated, misused, or infringed other parties' intellectual property rights, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property claims.
+Added: Any litigation regarding intellectual property could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations.
+Added: Significant judgments are required for the determination of probability and the range of the outcomes in any legal dispute, and the estimates are based only on the information available to us at the time.
+Added: Due to the inherent uncertainties involved in claims, legal proceedings, and in estimating the losses that may arise, actual outcomes may differ from our estimates.
+Added: Contingencies deemed not probable or for which losses were not estimable in one period may become probable, or losses may become estimable in later periods which may have a material impact on our results of operations and financial position.
+Added: Intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from manufacturing or licensing certain of our products, cause severe disruptions to our operations or the markets in which we compete or require us to satisfy indemnification commitments to our customers.
+Added: Any of these could seriously harm our business.
+Added: We are currently party to litigation with Appian Corp.
+Added: - see Part I, Item 3 “Legal Proceedings”, "Note 20.
+Added: Commitments And Contingencies" in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report and the preceding risk factor captioned “If we are unsuccessful in the appeal of the trial court judgment in our litigation with Appian Corp., our operating results and financial condition would be adversely impacted.” While we continue to believe that we have the financial strength to pay these amounts if it ever becomes necessary, it is possible that we may not be able to engage in these activities on desirable terms, which could have a material adverse effect on our business, financial condition, and operating results.
Our success depends in part on maintaining and increasing our sales to clients in the public sector.
−Removed: We derive a portion of our revenues from contracts with federal, state, local, and foreign governments and agencies.
+Added: We derive a portion of our revenues from contracts with domestic and foreign governments and related agencies.
We believe that our business’s success and growth will continue to depend on our successful procurement of government contracts.
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Bribery Act, and similar foreign anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to obtain or retain business.
−Removed: Similar laws and regulations exist in many other countries throughout the world in which we do or intend to do business.
−Removed: Data privacy laws and regulations in Europe, Australia, Latin America, and elsewhere are undergoing a rapid transformation toward increased restrictions.
−Removed: In April 2016, the European Parliament adopted the General Data Protection Regulation (“GDPR”).
−Removed: It became effective in May 2018.
−Removed: The GDPR extends the scope of European privacy laws to any entity that controls or processes personal data of European Union residents in connection with the offer of goods or services or the monitoring of behavior and imposes new compliance obligations concerning the handling of personal data.
−Removed: Complying with the GDPR and other emerging and changing requirements caused us to incur additional costs in 2021 and may cause us to incur substantial additional costs or require us to change our business practices.
−Removed: Compliance also depends on how regulators choose to interpret and apply the new requirements.
−Removed: Moreover, non-compliance, or if regulators assert we have not complied, with GDPR could result in significant monetary penalties of up to the higher of 20 million Euro or 4% of annual worldwide revenue, private lawsuits, and damage to our reputation, which could have a material adverse effect on our business, financial condition, and results of operation.
−Removed: The California Consumer Privacy Act (“CCPA”), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling certain personal data of consumers or households, went into effect on January 1, 2020, and the California Attorney General may now bring enforcement actions for violations.
−Removed: The CCPA requires, among other things, covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.
−Removed: Further, California voters approved a new privacy law, the California Privacy Rights Act (“CPRA”) in the November 3, 2020 election.
−Removed: Effective January 1, 2023, the CPRA will significantly modify the CCPA, including by expanding California consumers’ rights with respect to certain sensitive personal information.
−Removed: The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.
−Removed: The CCPA and CPRA may increase our compliance costs and potential liability.
+Added: Similar laws and regulations exist in many other countries where we do or intend to do business.
+Added: Within recent years, there has been an increase in the scope and enforcement of data privacy laws in the jurisdictions in which we do business.
+Added: The European Parliament adopted the General Data Protection Regulation (“GDPR”), effective May 2018, that extended the scope of European privacy laws to any entity that controls or processes personal data of European Union residents in connection with the offer of goods or services or the monitoring of behavior and imposes new compliance obligations concerning the handling of personal data.
+Added: The California Consumer Privacy Act (“CCPA”), effective January 2020, requires, among other things, covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.
+Added: The CCPA was modified as of January 1, 2023 by the California Privacy Rights Act (“CPRA”) which expands California consumers’ rights with respect to sensitive personal information and which created a new state agency that is vested with authority to implement and enforce the CCPA and CPRA.
+Added: Compliance with these varying regimes has caused and will cause us to incur additional costs, including as may result from any non-compliance or asserted non-compliance.
We have developed and implemented a compliance program based on what we believe are reasonable practices, including the background checking of our current partners and prospective clients and partners.
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and foreign jurisdictions.
−Removed: The determination of our tax liability is always subject to audit and review by applicable domestic and foreign tax authorities, and we are currently undergoing several inquiries, audits, and reviews by taxing authorities throughout the world.
+Added: The determination of our tax liability is always subject to audit and review by applicable domestic and foreign tax authorities.
+Added: We are undergoing inquiries, audits, and reviews by various taxing authorities.
Any adverse outcome of any such audit or review could harm our business, and the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made.
−Removed: While we have established reserves based on assumptions and estimates that we believe are reasonable to cover such eventualities, these reserves may prove to be insufficient.
+Added: While we have established reserves based on assumptions and estimates that we believe are reasonable to cover such eventualities, these reserves may prove insufficient.
In addition, our future income taxes could be materially adversely affected by a shift in our jurisdictional income mix, by changes in the valuation of our deferred tax assets and liabilities, because of changes in tax laws, regulations, or accounting principles, as well as by certain discrete items.
−Removed: In the United States, such tax law changes could include the impact of the currently enacted mandatory capitalization of research and experimentation expenses, effective for tax years beginning after December 31, 2021 (but postponed to 2026 in the proposed Build Back Better (“BBBA”) Act, which is currently under consideration in the United States Congress), or new tax revenue-raising provisions also tied to the proposed BBBA.
+Added: In the United States, such tax law changes will include the impact of the currently enacted mandatory capitalization of research and experimentation expenses, effective for tax years beginning after December 31, 2021 unless the effective date is retroactively postponed by the United States Congress.
Globally, the Organization for Economic Cooperation and Development Inclusive Framework on Base Erosion and Profit Shifting is advancing fundamental changes to the international corporate tax system creating new rules for allocating rights to tax global income and a global minimum tax.
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states are also altering their apportionment formulas to increase the amount of taxable income or loss attributable to their state from certain out-of-state businesses.
−Removed: Similarly, in Europe and elsewhere globally, there are various tax reform efforts underway designed to increase the taxes paid by corporate entities.
−Removed: If it becomes necessary or desirable to repatriate any of our foreign cash balances to the United States, we may be subject to increased taxes, other restrictions, and limitations.
+Added: Similarly, in Europe and elsewhere globally, various tax reform efforts underway are designed to increase the taxes paid by corporate entities.
+Added: If it becomes necessary or desirable to repatriate our foreign cash balances to the United States, we may be subject to increased taxes, other restrictions, and limitations.
As of December 31, 2022, $48.8 million of our cash and cash equivalents were held in our foreign subsidiaries.
−Removed: If it becomes necessary or desirable to repatriate these funds, we may be required to pay U.S.
−Removed: federal, state, and local income and foreign withholding taxes upon repatriation.
+Added: If it becomes necessary or desirable to repatriate these funds, we may be required to pay federal, state, and local income and foreign withholding taxes upon repatriation.
We consider the earnings of our foreign subsidiaries to be permanently reinvested.
−Removed: As a result, U.S.
−Removed: federal, state, and local, and foreign withholding taxes on such earnings have not been provided in our financial statements.
+Added: As a result, domestic and foreign taxes on such earnings have not been provided in our financial statements.
It is not practical to estimate the amount of tax we would have to pay upon repatriation due to the complexity of the tax laws and other factors.
−Removed: We face risks related to intellectual property claims or appropriation of our intellectual property rights.
−Removed: We rely primarily on a combination of patent, copyright, trademark, and trade secrets laws, as well as intellectual property and confidentiality agreements to protect our proprietary rights.
−Removed: We also try to control access to and distribution of our technologies and other proprietary information.
−Removed: We have obtained patents in strategically important global markets relating to the architecture of our systems.
−Removed: We cannot be certain that such patents will not be challenged, invalidated, or circumvented, or that rights granted thereunder, or the claims contained therein will provide us with competitive advantages.
−Removed: Moreover, despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our software or to obtain the use of information that we regard as proprietary.
−Removed: Although we generally enter into intellectual property and confidentiality agreements with our employees and strategic partners, despite our efforts our former employees may seek employment with our business partners, clients, or competitors, and there can be no assurance that the confidential nature of our proprietary information will be maintained.
−Removed: In addition, the laws of some foreign countries do not protect our proprietary rights as effectively as they do in the U.S.
−Removed: There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar technology.
−Removed: Other companies or individuals have obtained proprietary rights covering a variety of designs, processes, and systems.
−Removed: Third parties have claimed and may in the future claim that we have infringed or otherwise violated their intellectual property.
−Removed: We are currently party to litigation with Appian Corp.
−Removed: – see Part I, Item 3 “Legal Proceedings” and Note 19 in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report.
−Removed: Although we attempt to limit the amount and type of our contractual liability for infringement or other violation of the proprietary rights of third parties and assert ownership of work product and intellectual property rights as appropriate, there are often exceptions, and limitations may not be applicable and enforceable in all cases.
−Removed: Even if limitations are found to be applicable and enforceable, our liability to our clients for these types of claims could be material given the size of certain of our transactions.
−Removed: We expect that software product developers will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps.
−Removed: Any such claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment and delivery delays, require us to enter into royalty or licensing agreements, or be precluded from making and selling the infringing software, if such proprietary rights are found to be valid.
−Removed: Royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all.
−Removed: These claims could also subject us to significant liability for damages, potentially including treble damages if we are found to have willfully infringed patents or copyrights.
−Removed: Even if a license were available, we could be required to pay significant royalties, which would increase our operating expenses.
−Removed: As a result, we may be required to develop alternative non-infringing technology, which could require substantial effort and cost.
−Removed: If we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software and may be unable to compete effectively, which could have a material effect upon our business, operating results, and financial condition.
−Removed: Intellectual property rights claims by third parties are extremely costly to defend, could require us to pay significant damages, and could limit our ability to use certain technologies.
−Removed: Companies in the software and technology industries, including some of our current and potential competitors, own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights.
−Removed: In addition, many of these companies can dedicate greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
−Removed: The litigation may involve patent holding companies or other adverse patent owners that have no relevant product revenues and against which our patents may, therefore, provide little or no deterrence.
−Removed: Third parties have claimed and may claim in the future that we have misappropriated, misused, or infringed other parties' intellectual property rights, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property claims.
−Removed: We are currently party to litigation with Appian Corp.
−Removed: – see Part I, Item 3 “Legal Proceedings” and Note 19 in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report.
−Removed: Any litigation regarding intellectual property could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations.
−Removed: Significant judgments are required for the determination of probability and the range of the outcomes in any legal dispute, and the estimates are based only on the information available to us at the time.
−Removed: Due to the inherent uncertainties involved in claims, legal proceedings, and in estimating the losses that may arise, actual outcomes may differ from our estimates.
−Removed: Contingencies deemed not probable or for which losses were not estimable in one period may become probable, or losses may become estimable in later periods which may have a material impact on our results of operations and financial position.
−Removed: Intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from manufacturing or licensing certain of our products, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments to our customers.
−Removed: Any of these could seriously harm our business.
−Removed: Actual or threatened public health emergencies could harm our business.
−Removed: The outbreak of a novel coronavirus disease (“COVID-19”) has spread across the globe and is impacting worldwide economic activity.
−Removed: A pandemic, including COVID-19, and other public health emergencies pose the risk that our employees, partners, and clients may be prevented from conducting business activities at full capacity for an indefinite period, including due to the spread of the disease within these groups or due to the shutdowns that are requested or mandated by governmental authorities.
−Removed: Moreover, these conditions can affect the rate of information technology spending and may adversely affect our clients’ willingness to purchase our solutions, delay prospective clients’ purchasing decisions, reduce the value or duration of their contracts, cause our clients to request concessions including extended payment terms or better pricing, or affect attrition rates, all of which could adversely affect our future sales and operating results.
−Removed: The global spread of COVID-19 has created significant uncertainty, and economic disruption.
−Removed: We have undertaken measures to protect our employees, partners, and clients, including allowing our employees to work remotely.
−Removed: There can be no assurance that these measures will be sufficient, however, or that we can implement them without adversely affecting our business operations.
−Removed: We continue to monitor COVID-19 and adjust our policies as more information and public health guidance become available.
−Removed: Precautionary measures that have been adopted, or may be adopted in the future, could negatively affect our client success, sales, and marketing efforts, delay and lengthen our sales cycles, or create operational or other challenges, all of which could harm our business and results of operations.
−Removed: In addition, COVID-19 may disrupt and change our clients’, vendors’, and partners’ operations in ways that are difficult to predict, including because of travel restrictions, business shutdowns, supply chain delays and/or more pervasive remote work environments, all of which could negatively impact our business, results of operations, and cash flows.
−Removed: At this time, it is not possible to estimate the ultimate impact that COVID-19 will have on our business, as the impact will depend on future developments, which are highly uncertain and unpredictable.
−Removed: Furthermore, due to our shift to a subscription model, the effect of COVID-19 may not be fully reflected in our results of operations until future periods.
−Removed: The extent to which COVID-19 impacts our business, operations, and financial results will depend on numerous evolving factors that we may not be able to predict accurately, including:
−Removed: • the duration and scope of the pandemic;
−Removed: • governmental, business, and individual actions taken in response to the pandemic and the impact of those actions on global economic activity;
−Removed: • the actions that are taken in response to economic disruption;
−Removed: • the impact of business disruptions and reductions in our clients’ business and the resulting impact on their demand for our services and solutions;
−Removed: • our ability to provide our services and solutions, including because of our employees or our clients’ employees working remotely and/or closures of offices and facilities.
General Risk Factors
−Removed: The provision in our amended and restated bylaws, requiring exclusive forum in certain courts in The Commonwealth of Massachusetts or the federal district court for the District of Massachusetts for certain types of lawsuits, may have the effect of discouraging lawsuits against us and our directors, officers, and employees.
+Added: The provision in our amended and restated bylaws, requiring exclusive forum in certain courts in The Commonwealth of Massachusetts or the federal district court for the District of Massachusetts for certain types of lawsuits, may discourage lawsuits against us and our directors, officers, and employees.
Our amended and restated bylaws provide that unless we consent in writing to the selection of an alternative forum, the Business Litigation Section of the Superior Court of Suffolk County, Massachusetts (the “BLS”) or, if the BLS lacks jurisdiction, the federal district court for the District of Massachusetts, Eastern Division, shall be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to the Massachusetts Business Corporation Act (the “MBCA”), our articles of organization, or our bylaws (as each may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine.
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The exclusive forum provision in our amended and restated bylaws will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws, including the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or the respective rules and regulations promulgated thereunder.
−Removed: The continued uncertainties in the global economy may negatively impact our sales to, and the collection of receivables from our clients.
−Removed: Our sales to, and the collection of receivables from, our clients may be impacted by adverse changes in global economic conditions.
−Removed: and other key international economies have experienced cyclical downturns from time to time, during which economic activity has been impacted by falling demand for goods and services, inflation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, bankruptcies, and economic uncertainty.
−Removed: These changes in global economic conditions could impact the ability and willingness of our clients to make investments in technology, which in turn may delay or reduce the purchases of our software and services.
−Removed: These factors could also impact the ability and willingness of these clients to pay their trade obligations and honor their contractual commitments.
+Added: Material adverse developments in global economic conditions, or the occurrence of certain other world events, could affect demand for our products, increase our costs of operation and harm our business.
+Added: Global economic uncertainty has produced, and continues to produce, substantial stress, volatility, illiquidity and disruption of global credit and other financial markets.
+Added: Various factors contribute to the uncertain economic environment, including the level and volatility of interest rates, high inflation, the conflict between Russia and Ukraine, the continuing effects of the COVID-19 pandemic, an actual recession or fears of a recession, trade policies and tariffs, and geopolitical tensions.
+Added: Economic uncertainty has and could continue to negatively affect the business and purchasing decisions of companies in industries in which our customers operate.
+Added: As global economic conditions experience stress and negative volatility, or if there is an escalation in regional or global conflicts, the ability and willingness of our customers to make investments in technology may be impacted, which in turn may delay or reduce the purchases of our software and services and also impact the ability and willingness of our customers to pay amounts due to us or otherwise honor their contractual commitments.
These clients may also become subject to increasingly restrictive regulatory requirements, which could limit or delay their ability to proceed with technology purchases and may result in longer sales cycles, increased price competition, and reductions in sales of our products and services.
−Removed: The financial uncertainties facing many of our clients and the industries in which they operate could negatively impact our business, operating results, and financial condition.
−Removed: The U.K.’s withdrawal from the European Union could have a material impact on our business, including our relationships with existing and future clients, suppliers, and employees, which could harm our financial results and operations.
−Removed: We have material operations in the U.K.
−Removed: and European Union.
−Removed: While the full effects of Brexit will not be known for some time, the ultimate or perceived impacts of the U.K.’s withdrawal from the European Union could potentially disrupt the markets we serve and the tax jurisdictions in which we operate.
−Removed: The impact of Brexit will depend on any agreements the U.K.
−Removed: makes to retain access to EU markets following the transition period.
−Removed: In addition, Brexit could lead to legal uncertainty, and potentially divergent national laws and regulations as the U.K.
−Removed: determine which EU laws to replace or replicate, presenting new regulatory costs and challenges.
−Removed: Any of these effects could materially adversely affect our business, results of operations, and financial condition.
+Added: At the same time, factors such as inflation may increase our costs of operation.
+Added: The combination of these factors could negatively impact our business, operating results, and financial condition.
+Added: Actual or threatened public health emergencies could harm our business.
+Added: Our business and operations could be adversely affected by health epidemics, including the current COVID-19 pandemic, impacting the markets and communities in which we, our partners and clients operate.
+Added: The COVID-19 pandemic has caused significant disruption to the business and financial markets, and there remains uncertainty about the duration of this disruption on both a nationwide and global level, as well as the ongoing effect on our business.
+Added: The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain and unpredictable.
+Added: We continue to monitor the COVID-19 situation and potential effects on our business and operations.
+Added: While the spread and impact of COVID-19 has stabilized, there is no guarantee that a future outbreak of this or any other widespread epidemics will not occur.
The market price of our common stock has been and is likely to continue to be volatile .
−Removed: The market price of our common stock may be highly volatile and may fluctuate due to a variety of factors, some of which are related in complex ways.
+Added: The market price of our common stock may be highly volatile and fluctuate due to a variety of factors, some of which are related in complex ways.
Factors that may affect the market price of our common stock include:
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If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.
−Removed: The trading market for our common stock depends, in part, on the research and reports that securities and industry analysts publish about us or our business.
+Added: The trading market for our common stock depends partly on the research and reports that securities and industry analysts publish about us or our business.
We do not have any control over these analysts.
−Removed: If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our stock price would likely decline.
+Added: If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our stock price will likely decline.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.